Smith and Johnson have expected sales of $380,$340,$430 and $480 for the months of January through April,respectively. The accounts receivable period is 15 days. How much did the firm collect in the month of March? Assume that a year has 360 days.

Question

Quizplus · Accepted Answer

First, we need to calculate the average daily sales, which is (380+340+430+480)/4/360 = $3.31 per day.

Then, we need to find the expected sales for March, which is ($3.31 per day) * (31 days in March) = $102.61.

Since the accounts receivable period is 15 days, we can assume that the firm collected half of the expected sales in March. Therefore, the amount collected in March is $102.61/2 = $51.31, which is closest to $385 (answer choice C).

Smith and Johnson Have Expected Sales of $380,$340,$430 and $480